ETHICS REPORTING SYSTEMS Chapter Eight Copyright © 2012 John Wiley & Sons Visit for the latest in business news stories

ETHICS REPORTING SYSTEMS

Chapter Eight

Copyright © 2012 John Wiley & Sons

Visit http://wileymanagementupdates.com/ for the latest in business news stories.

Chapter 8

Learning Objectives

Understand why some employees do not report ethical misconduct

Describe how to engage employees in discussing ethical misconduct

Administer an internal reporting system for ethical issues

Create an Ethics and Compliance Officer and ombudsperson position

Manage an assist line to receive employee complaints by telephone or Internet

Describe the negative outcomes whistle-blowing has on both the whistle-blower and the organization

Chapter 8: Collins, Business Ethics

Employee Silence on Ethical Misconduct

Exhibit 8.1 highlights how often an observed ethical misconduct that benefited the organization or an employee is unreported



Why don’t employees intervene whenColleagues and managers ethically

misbehave?

Why don’t employees at least inform theperson’s superior?



Insert Exhibit 8.2


Ethically Approachable Managers

The best ethics reporting system is a manager who welcomes ethical discussions with employees

Employees are more likely to discuss an ethical concern with a manager if these types of discussions occur on a regular basis rather than only during dire circumstances


Ethically Approachable Managers

Becoming an “approachable” manager is an important managerial skill for helping employees overcome fears about discussing any workplace problem

Approachability also means having frequent interactions with subordinates


Ethics & Compliance Officer

The Federal Sentencing Guidelines provide a judicial incentive for assigning a high-level employee the responsibility of managing ethical performance

A growing number of organizations assign this responsibility to an Ethics & Compliance Officer

The position enables sensitive information to be shared without being diluted or stymied by the chain of command



Insert Tips and Techniques Ethics & Compliance Officer Attributes



Insert Exhibit 8.3




Ombudsperson

By providing employees with an institutional voice, the ombudsperson serves as a deterrent against managerial abuse of power

An ombudsperson is held legally accountable to a professional Code of Ethics


Ombudsperson

The International Ombudsman Association’s Codeof Ethics highlights four ethical principles andcorresponding policies1.Independence: The ombudsperson is independent

in structure, function, and appearance to the highest degree possible within the organization

2.Neutrality and impartiality: The ombudsperson remains unaligned and impartial and does not engage in any situation that could create a conflict of interest


Ombudsperson

3. Confidentiality: The ombudsperson holds all communication in strict confidence and does not disclose confidential communications unless given permission to do so. The only exception to this privilege of confidentiality is when there is an imminent risk of serious harm

4. Informality: The ombudsperson does not participate in any formal adjudicative or administrative procedure related to concerns brought to his or her attention


Chaplains

Chaplains are members of a religious clergy trained in providing spiritual advice

Corporate Chaplains originally provided care for employees and their families

Over time, their list of services expanded to include helping employees manage ethical dilemmas and interactions with other employees


Assist Lines

Types of InquiriesMany organizations now refer to this

communication channel as an assist line rather than an ethics hotline

The phrase “ethics hotline” makes it seem as though the employee is snitching

“Assist” more accurately describes most of the calls that are received


Assist Lines

Assist lines are a method of obtaining information about situations that may be unethical or illegal

Nearly all Fortune 500 companies provide toll-free assist lines for employees from all over the world to share their concerns

Small organizations can contract out to an assist line managed by a third party


Assist Lines

Effective Assist LinesAssist line success requires honoring

confidentiality at all times

Assist lines can be designed to uniquely address professional issues or to ensure that assist line contractors adequately address specific concerns


Assist Lines

How an Assist Line WorksEthicsPoint—an employee anonymously

contacts EthicsPoint by email or telephone and receives a confidential case identification number

Employees comfortable with the system can provide their names, but this is not required


Assist Lines

The response system is scripted to gather as much information as possible from an anonymous employee

The information is categorized based on the type of issue and operations area and then routed to the appropriate manager at the employee’s organization

The manager who receives the information responds to the EthicsPoint system using the case identification number


Whistle-blowing

When to Blow the WhistleBegin by consulting with an attorney. Legal

advisors recommend that the following four conditions be met before an employee informs an external authority:

1.Serious harm is involved2.The whistle-blower has already expressed his or

her concerns to an immediate superior3.The whistle-blower has exhausted other

communication channels within the organization4.The whistle-blower has convincing, documented

evidence


Whistle-blowing

The False Claims Act was initially passed in 1863 during the Civil War to prevent defense contractors from fraudulently selling Union Army rifles, ammunition, and horses

President Ronald Reagan’s administration strengthened the Act in 1986

An employee who independently sues his or her employer for fraud can now receive between 15 and 30 percent of the total recovery amount plus attorney fees and related costs for successful lawsuits


Whistle-blowing

Insert Exhibit 8.5


Whistle-blowing

Reporting Tax FraudThe IRS created a Whistleblower Office to

receive information about possible individual or corporate tax frauds

The IRS Whistleblower Office modeled a Whistleblower Reward Program after the False Claims Act, paying whistle-blowers 15 to 30 percent of the unpaid taxes recovered


Whistle-blowing

Insert Exhibit 8.6


Whistle-blowing

Sarbanes-Oxley Act of 2002 (SOX)According to SOX, no publicly traded

company or subcontractor of that company can discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a whistle-blower

It also establishes criminal penalties for retaliation against whistle-blowers of fines and imprisonment up to 10 years


Whistle-blowing

Negative Outcomes for Whistle-blowersResearchers report that soon after blowing

the whistle, many whistle-blowers experience1. Negative performance evaluations2. Undesired job transfers3. Demotions 4. Criticism or avoidance by coworkers5. Physical, psychological, and family problems6. Loss of job or forced retirement7. Blacklisting impeding employment8. Protracted legal battles waged at personal expense


Documents

ETHICS REPORTING SYSTEMS Chapter Eight Copyright © 2012 John Wiley & Sons Visit for the latest in business news stories